HSBC Sued Over $578 Million ‘Fake’ Profit From Madoff

HSBC Holdings Plc and a Cayman Islands-based hedge fund were sued by the trustee liquidating Bernard Madoff’s business over claims they withdrew $578 million in “fake” profit from the con man’s firm before it collapsed.

The lawsuit, filed today by trustee Irving Picard in U.S. Bankruptcy Court in Manhattan, claims London-based HSBC withdrew most of the money on behalf of its client, Herald Fund Spc, less than 90 days before Madoff’s firm began liquidating. Picard says such transfers are recoverable under U.S. bankruptcy law.